Chapter 3

Question 1

What type of insurance covers the construction of ships?
a. Builders risk. □
b. Hull and machinery. □
c. P&I. □
d. Stock throughput.

Answer 1

a. Builders risk

Question 2

If you own a gallery and want to insure paintings and sculptures, which type of
insurance do you need?
a. Jewellers’ block. □
b. Fine art. □
c. Stock throughput. □
d. Cargo

Answer 2

b. Fine art

Question 3

Which of these precautions do ‘cash in transit’ insurers not expect their insured to
take?
a. Varying the routes. □
b. Mixing up the teams being used. □
c. Not leaving the vehicle unattended. □
d. Only driving in daylight

Answer 3

D- Only driving in daylight

Question 4

What type of risks does political risk insurance cover?
a. Government ordering a lockdown. □
b. Assets being seized by authorities. □
c. Unpopular governments being elected. □
d. Economic recession

Answer 4

b. Assets being seized by authoritie

Question 5

If a business wants to insure against employees stealing money from it, which type of
insurance is suitable?
a. Fidelity guarantee. □
b. Employers’ liability. □
c. Theft insurance. □
d. Business interruption

Answer 5

A- Fidelity guarantee

Question 6

What does a typical business interruption policy cover?
a. Loss of income due to a new competitor in your industry. □
b. Loss of income because what you are selling is not fashionable any more. □
c. Loss of income following physical damage to a factory. □
d. Loss of income following employee theft.

Answer 6

C-. Loss of income following physical damage to a factory.

Question 7

Which type of insurance would it be sensible for businesses as diverse as shops and
nightclubs to buy?
a. Political risk. □
b. War. □
c. Professional indemnity. □
d. Public liability

Answer 7

D- public liability

Question 8

How is personal accident different from other types of insurance?
a. It can only be purchased by consumers. □
b. It is a benefit policy, not an indemnity policy. □
c. It has very small policy limits. □
d. It cannot be sold by Lloyd’s insurers

Answer 8

It is a benefit policy, not an indemnity policy

Question 9

Which of these is not a standard aviation-related liability?
a. Professional negligence. □
b. Products. □
c. Passengers. □
d. Third parties other than passengers

Answer 9

a. Professional negligence

Question 10

If an insurer is buying “whole account” reinsurance, what are they protecting?
a. Single individual risks

Answer 10

All the risks written by the insurer.